Opinion of the Economic and Social Committee on 'Making sure that EC aid produces the best possible results'
Date: 2000-03-30
Institutions: European Economic and Social Committee, Provisional data
Subjects: EU aid, EU programme, cooperation policy, development aid, use of aid

18.5.2000

EN

Official Journal of the European Communities

C 140/55

Opinion of the Economic and Social Committee on ‘Making sure that EC aid produces the best
possible results’

(2000/C 140/13)

On 9 December 1999 the Economic and Social Committee decided to draw up an opinion in accordance
with Rule 23(3) of its Rules of Procedure on ‘Making sure that EC aid produces the best possible results’.

The Section for External Relations which was responsible for preparing the Committee’s work on the
subject, adopted its opinion on 16 March 2000. The rapporteur was Mr Wilkinson.

At its 371st plenary session on 30 March 2000 the Committee adopted the following opinion with
88 votes in favour and 5 abstentions.

1.

Introduction

1.1.
The Economic and Social Committee has given its
opinion on development aid previously, most recently in 1997
(CES 596/97) which covered development aid (primarily to
ACP countries), good governance and the role of socio-
economic groups. The 1997 opinion stressed the Committee’s
continuing support for the EU giving economic and financial
aid to developing countries, the central importance of good
governance to sustainable development and the need for
radical reform of the administration of development grants.

1.2.
The EC currently spends over EUR 5,5 billion each
year on development funding. When combined with the
contributions that Member states also make bilaterally, the
total EU effort amounts to well over half of the world’s official
development aid although the ESC deeply regrets that in
quantitative terms, the European Union and the majority of its
Member States are very far from allocating 0,7 % of their GNP
to development aid, as the United Nations recommended in
1973. This effort covers a very wide variety of
funding
programmes and beneficiaries, although much of it is concen-
trated on help to ACP countries and countries that are
applicants for EU membership.

1.3.
The Commission has worked hard to improve its
management of the development programmes and progress
has been made. The two main changes have been, first the
formation of the Service Commun Relex (SCR) in 1998 with
responsibility for the technical, operational, contractual, legal,
financial and accounting aspects and responsibility for
assessing and auditing work done and secondly, the new
structure for external relations, aimed at increasing policy
coherence.

1.4.
However, concerns remain; this is evident from reports
in 1998 such as the Evaluation of Phare and the Evaluation of
Aid to ACP countries, which both comment on the emphasis
on input rather than on results. Structure, personnel resources
and the need for a more appropriate system of financial
controls continue to give concern.

Various studies and reforms are now in progress on
1.5.
both the policy and the management aspects of EC aid. The
Committee hopes that this opinion will contribute to that
debate by considering, and making proposals on, both these
areas. Inevitably, many other important dimensions of devel-
opment cooperation, such as the relationship between aid and
trade, the need for debt relief or the question of building public
support aid, fall outside the remit of this opinion.

2. Development Aid in a Changing World

2.1.
Over recent years the context within which all develop-
ment aid donors have worked has changed considerably. The
main changes have been:

— the increased politicisation of aid, reflected in greater
donor concerns for fundamental human and social rights,
gender equality, democracy and good governance;

— the widening policy agenda, reflecting new priorities, such
as the private sector and institutional development, and
conflict prevention;

— the need to include more interests in the process, notably
organised civil society, local government, business interests
and social organisations;

— growing pressures to account more fully for aid funds;

— the need for greater coordination, complementarity and

policy coherence.

2.2.
However, this changing environment has been little
reflected in the implementing strategy or the machinery
governing aid delivery, despite a significant number of studies
pointing to the need for change. Within the EU there has been
little wide debate on what reforms are necessary, except in
EU/ACP co-operation, where important reforms have been
proposed for the successor to the Lomé IV agreement as
mentioned later.

C 140/56

EN

Official Journal of the European Communities

18.5.2000

2.3.
The Committee welcomes the Council’s and the Com-
mission’s recognition that fundamental debate, which should
lead to fundamental reform, is now urgently needed.

4.3.
The Committee acknowledges the overall EU develop-
ment policy objectives defined in the Treaty of Maastricht. The
ultimate aim of aid is to increase the stability and social
performance of recipients so that they may develop their full
potential to improve the well being of their people. Thus aid
must be ‘capacity building’, with its emphasis on the increasing
responsibility for, and ownership of, projects by recipients.

3. Key Challenges

3.1.
The first key challenge in considering reform options
for EU aid is to agree the nature of the problem. It makes little
sense to look at bottlenecks in delivery without considering
the more fundamental question of the specific role and added
value of EU aid. The mandate of the Commission needs to be
more sharply defined and agreed. Thereafter the related policy
and institutional changes can be identified and implemented.

3.2.
As part of EU policy as a whole, the decisions will
essentially be political and will not be easy. For the reform
process to succeed will require unambiguous political support
from Member States and a stronger common European
external policy, as well as support from others involved,
including budgetary authorities and recipient countries.

3.3.
The Committee hopes that Member States will take the
decisions, and the subsequent actions, needed to strengthen
the role of the EU in development aid and to increase its
efficiency and effectiveness; and will give the subject more
importance on the future political agenda.

4.4.
It is estimated that one in four of the world’s population
lives in extreme poverty. Action against poverty is not only
ethical, but also of wide benefit because stability, sustainable
development and democratisation cannot be achieved in
societies with extreme levels of poverty. The Committee
recommends that EC aid should take into account the inter-
national development targets that have recently been agreed.
EC action should focus on the root causes of poverty, which
are normally political; different policy instruments (aid, trade,
foreign policy, etc.) should be used in a complementary
manner to this end. Action aimed at reducing poverty must be
a central objective of EC aid, alongside other EU priorities.

4.5. We recommend that preference should be given to
those countries that undertake to give priority to action that
will reduce the root causes of poverty and that then demon-
strate that they are serious in this undertaking. Adopting a
more strategic approach also means concentrating EC aid on a
number of sectors, where the Commission has a comparative
advantage, and coordinating efforts with other agencies, which
can take the lead in other sectors.

4. Policy

4.1.
Effective EC aid must start with a clear and agreed
policy. Since the EU is a supranational political entity, EC
development policy will be shaded to allow for both the
interests (for example, aid given to the
EU’s fundamental
enlargement process) and its obligations as a global player
towards developing countries in all their diversity.

4.2.
The EU’s overall policy must have strategic aims and
must allow clear priorities to be set. These aims, and not
various instruments or budget lines, must drive EC action. It
must embrace all aspects of the EU’s ties with recipient
countries and must look for impact in its results. Development
goes far beyond the transfer of resources to developing
countries. An effective EC aid policy must take account of
recipient countries’ priorities in areas such as agriculture,
It must seek to agree with
environment and investment.
beneficiaries which sectors should get aid, and the percentage
of total EU aid that should be allocated to each sector.

The fullest participation of more local development
4.6.
players, including socio-economic players, in the formulation
and implementation of development policies and programmes
is essential and can make a major contribution to good
governance and sustainable development. It is also necessary
to help in achieving the improved social performance that will
follow successful development and in the integration of
developing countries into the global economy.

4.7.
In this context, the Committee welcomes the changes
proposed for the successor agreement to Lomé IV, aimed at
including the participation of such players in the mainstream
of formulating and implementing ACP-EU co-operation. It
calls on the EC to ensure that these reforms are in fact
implemented, notably through improved dialogue, users-
friendly information, access to funding and capacity building
for economic and social actors.

18.5.2000

EN

Official Journal of the European Communities

C 140/57

4.8.
One of the main causes of inadequate development is
corruption, which is assessed as widespread in many recipient
countries. While recognising that corruption also exists in
aid-giving countries, EU policy on development must be
accompanied by a programme aimed at reducing corruption.
Since corruption feeds mainly off the lack of democratic
controls, anti-corruption programmes should include more
transparency, greater involvement of organised civil society,
insistence on the need for recipients to develop and implement
their own anti-corruption plans and an annual EU report on
the fight against corruption. Funding for anti-corruption
programmes should be permitted from the EC development
budget.

5. Co-ordination

At Council level, most development matters are dealt
5.1.
with by the Development Council, but some are the responsi-
bility of the General Affairs Council. Commissioner Nielson is
responsible for the Directorate General for Development, but
has direct responsibility only for the European Development
Fund, covering ACP countries (and for ECHO); Commissioner
Patten is responsible for a greater amount of funding, covering
Phare, Tacis, Obnova and other programmes, and for Service
Commun Relex (SCR).

5.2.
Given the split of responsibilities in Council, between
Commissioners and between the various Directorates General
and SCR, further consideration also needs to be given to co-
ordination within the Commission. In particular, the split
of responsibilities between those who initiate and agree
development projects (in the Directorates General) and those
who then have to manage and assess the projects (SCR) must
lead responsibility for policy
cause difficulties. The overall
must be clear.

5.3.
A far greater problem area lies in trying to co-ordinate
the EU programmes with those of other donors. In the first
instance there are the bilateral programmes of Member States;
there are also UN, World Bank, IMF and other programmes.

5.4.
It would clearly be helpful to accelerate and deepen
measures to increase complementarity between EC and Mem-
ber States’ work. The EC’s Communication to the Council and
the European Parliament of May 1999 (1) attempts to promote
complementarity and would provide a useful starting point.
Recognising the value of EC aid in conveying European values
of co-operation and stability and the notion of a participative
democratic system, EC should specify what value added it
excepts from its development work. The move towards a more
sectoral approach, in close coordination with other Member
States or agencies, is welcomed.

(1) COM(1999) 218 final of 6.5.1999.

5.5.
If Member States could work jointly with the Com-
mission on analysing the needs of each recipient country and
then use this as the basis for establishing, with the recipient, a
strategy to meet the needs identified, the complementarity of
EU and Member State work would be more easily assured.

At present even the exchange of

information on
5.6.
bilateral projects is not good. Once a strategic and realistic EU
policy agenda has been set, and given the necessary political
will,
it should be relatively easy to establish a system for
deciding who should do what, so that the ‘three Cs policy’ (co-
ordination, complementarity and coherence) agreed by Council
becomes a reality.

5.7.
Co-ordination with third parties (UN, World Bank,
etc.) will be more difficult, but should become easier as a more
successful EU aid programme shows its value. The World Bank
proposal for a Common Development Framework could also
be useful in this respect.

5.8.
All concerned must work in the closest co-operation
to ensure that the output (results achieved) are as good as
possible for the inputs (resources used) involved. This would
include ensuring that resources allocated are used to the full,
rather than the present much less than optimal figure.

6. Procedures

6.1.
It is widely documented and recognised that procedures
for setting up and managing projects have been far too
complicated and have involved far too many people in even
simple decisions. This appears to be changing as the result of
the work of SCR. It remains to be seen whether, in practice,
the new procedures are resulting in better and quicker delivery
and a reduction in too much bureaucracy. Authority must be
delegated more effectively and accountability needs to be
clearer. This would improve motivation, ease the demands on
staff time and, most importantly, make it much easier to see
where problems that do arise can be corrected.

6.2. Member States naturally wish to remain involved in EC
funded aid, but they should concentrate on strategic issues and
avoid the temptation to micro manage projects if procedures
are to be flexible and responsive enough.

The role of the EU delegations in countries receiving
6.3.
aid has been increased and this can only have a positive effect.
Not only will direct links with those benefiting from the aid be
improved, so that their needs and their wider concerns are
fully taken into account, but the opportunity will exist for
much simpler and quicker decision making. This opportunity
must be grasped.

C 140/58

EN

Official Journal of the European Communities

18.5.2000

6.4.
Decentralisation to EU Delegations (or to some other
decentralised body, such as the Decentralised Implementation
Units proposed by the European Parliament) will only work if
there is a match between the decentralised resources available
and the responsibilities to be covered. The involvement of
local players (central and local government and the representa-
tives of organised economic and social life) in the management
process will help to increase ownership of the programmes
while reducing the workload on the EU delegations. The
Committee supports the increased application of decentralised
co-operation with local players, but regrets the problems
generally encountered by bodies representing the economic
and social interest groups in gaining access to this kind of
cooperation. The ESC therefore proposes that staff be appoint-
ed within the EU delegations with specific responsibility for
improving relations with civil society organisations.

6.5.
Decentralisation requires trust and a change of empha-
sis from pre project to post project control by Commission
staff, with full audit being a post project activity. It would
also require the amendment of EU financial regulations.
Amendments must also allow for fact that there are only
limited financial management resources available to many
recipient countries.

6.6.
The use of NGOs in the implementation of aid is
considerable, involving substantial funds on a yearly basis. It
is also important because of the possibility of co-financing by
NGOs. The Committee sees no reason why NGOs should not
be used as ‘contractors’ to deliver aid, but they are only one
part of society; others should have equal opportunities to
participate in EC aid programmes. The expected harmonisation
of EU budget lines gives an excellent opportunity to improve
coherence by creating a ‘civil society’ budget line accessible to
the broad range of societal actors,
including social and
economic actors, from the EU and from recipient countries.
The decision must be based on the contribution that they can
make towards achieving the agreed strategic objectives.

In accordance with the need for a culture that is ‘results
6.7.
oriented’, the key area needing improvement is evaluation.
Each project must work to evaluation criteria, established
when the project is agreed and capable of amendment as a
project continues. The evaluation function must be indepen-
dent of those operating the projects and in co-operation with
representatives of the receiving nation who are in a position
to judge the value of the work completed; these should include
representatives of civil society.

in the public domain, but an annual report on EU development
aid globally should be produced for the benefit of both EU and
other audiences.

7. Resources

7.1.
To achieve the best results adequate human resources
must be devoted to planning, conducting and evaluating
projects or to ensure effective coordination on the ground. It
is clear that the EC expansion of roles, responsibilities and
budget lines, has not been matched with an appropriate
increase in human resources. Creative and efficient ways
should be found to address this major impediment to improved
aid effectiveness.

7.2.
Improving the human resource base is not simply a
question of numbers. It is also vital to consider the skills, and
particularly the new skills, required to implement a broader
development agenda effectively. Options to fill gaps in skills
that are identified include greater complementarity by using
EU wide expertise and the use of local experts (where available),
which would boost local employment and enhance capacity
building.

8. Communications

8.1.
There is, as stated earlier, already much information
on EC development aid in the public domain. However, the
Committee suggests that there is a need to inform EU citizens
of the reasons for, and value of, such aid; they have a right to
know how their money is being spent in this as in other areas.

8.2.
In the recipient nations, the quality of the development
work can be expected to play a significant role in informing
the public. The involvement of free, independent and represen-
tative organisations from society in the decision and manage-
ment processes for projects will be the best way to ensure that
the results have real impact, but the Committee recommends
that the EC, together with the government of the recipient
country, should also undertake systematic information of civil
society about development aid. The EC is also invited to
increase support for direct partnerships and collaboration
between organised social and economic actors from Europe
and the recipient countries.

6.8.
Evaluation and monitoring are not a scientifically
accurate procedure, nor can its results be guaranteed until after
some years. But it is necessary to show that results are
improving. The evaluation results are already largely available

8.3.
This effort should be assisted by liaison committees
that include the local economic and social actors and local EU
representations able to give advice on all phases of the
development work (initiation, progress and evaluation). The
Committee would welcome involvement in this work.

18.5.2000

EN

Official Journal of the European Communities

C 140/59

8.4.
To add to the impact of EC development work a single
‘identity’ should be established and promoted (along the lines
of ‘US Aid’, which is instantly recognisable). This ‘identity’
should be used for all EC funded aid programmes, whatever
name may be used for the individual programmes internally.

9. Recommendations

The Committee makes the following recommendations on EU
development aid.

9.1.
The overall policy for EU development aid must have
strategic aims that take full account of other EU policies and
of political priorities as well as of principles laid down in the
Treaty.

9.2.
Some preference should be given to aid that tackles the
root causes if inadequate development and poverty and to the
strengthening of economic and social organisations, essential
for sustainable development.

A complementary policy to reduce the effects of both

9.3.
active and passive corruption must also be implemented.

9.4.
For each recipient country the EU and the country
concerned must first agree on which sectors should receive
aid, by percentage, instead of agreeing lists of projects.

It is essential that the Commission co-ordinates more
the

9.5.
effectively its development aid efforts with those of
Member States, and other donors, where possible.

9.6.
Procedures must be changed to simplify them, making
them more flexible and delegating authority more, while
clarifying accountability.

Brussels, 30 March 2000.

9.7.
Decentralisation is necessary and should be increased.
Local EU delegations should establish contacts to allow the
active participation of local economic and social actors.

9.8.
To ensure the best management and the best possible
results from programmes, all socio-economic actors, including
the private sector, local government trade unions and NGOs,
must have equal opportunities to participate in EC aid
programmes.

The Commission must ensure that

9.9.
the resources
allocated to EC development aid are adequate for the tasks
given.

9.10.
An annual report should be produced on the whole
EC aid programme. It should be submitted to the European
Parliament and to the European Economic and Social Com-
mittee as well as to others.

9.11.
The full involvement of organised civil society in each
recipient country is essential to ensure the impact of EC aid
and its success. It must be promoted vigorously and must be
included in the evaluation process. It must also be a factor
in deciding in the allocation of
further EC funding for
development.

9.12.
promoted.

A single EC aid identity should be established and

9.13.
The Committee intends to take an active part in
ensuring greater transparency and democratisation of EC
aid programmes through the greater involvement of local
economic and social actors, and would welcome a clear
mandate in this respect.

Finally, the Committee notes that the essential and
9.14.
inescapable ingredient for a successful EC aid programme is
political will on the part of the Member States. It urges the
Member States to show that will.

The President

of the Economic and Social Committee

Beatrice RANGONI MACHIAVELLI